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Steele...
You are the first person or place I have heard this from- thanks.... I have a client who I think might qualify for HAFA because his payment exceeds 31% of income. However, everything I have read says he will need to qualify for HAMP first. Can you tell me how you started? I mean did you go to the lender before listing the property? Did you just have your client call and ask 'how do i participate in HAFA?" any help greatly appreciated...
Thanks
Steele V. Propp said:Actually your WF person was wrong on HAFA qualifications. One does not have to go through HAMP. A seller can request a short sale right off the bat. Review the HAFA guidelines and you will see this in addition to the other items.
Personally if you have a short sale in process it makes no sense to switch to HAFA (IMHO). Between investor and seconday lien fallout it would probably not come together anyway.
What is missing from the NAR quote is the fourth item for consideration:
"Requests a short sale or DIL."
This is from page 4 of the rivised directive HAFA dated 3/26/2010.
Laurel Starks said:According to our in-house attorney and from what we've read from NAR, it appears that the borrower must be considered for HAMP prior to being considered for HAFA. If a borrower requests HAFA off the bat, the servicer must first run them through HAMP - even if the borrower doesn't want to keep the house. They must offer them the modification if they qualify for it. NAR's publications states as follows:
Servicers must consider HAMP-eligible borrowers for HAFA within 30 days after the borrower does at least one of the following:
o Does not qualify for a HAMP trial period plan.
o Does not successfully complete a HAMP trial period plan.
o Is delinquent on a HAMP modification (misses at least 2 consecutive payments).
I do agree that there is a lot of confusion on HAFA - and in my office, we have all come to the conclusion that we can interpret the guidelines all we want to, but ultimately the servicers are going to have their own interpretation and implement accordingly. In sum, it is going to be a trial and error kind of thing, as is just about everything in real estate.
And I do agree - the investor and the second would likely ruin my sellers' chances anyway. Fortunately, my seller thinks so too and we are carrying on with our "traditional" short sale.
I agree with you on the forth missing item as I read that too. I also agree with others that it ultimately is up to how the servicer interprets the regulations. If a servicer requires your clients to run through HAMP first, most servicers allow your client to give their financials over the phone. If your client turns in their numbers as being even a little in the negative per month, they will be denied for HAMP and you can move to the next step of a short sale. I hope this helps. By the way, even BOA is taking numbers over the phone now.
Steele V. Propp said:What is missing from the NAR quote is the fourth item for consideration:
"Requests a short sale or DIL."
This is from page 4 of the rivised directive HAFA dated 3/26/2010.
Laurel Starks said:According to our in-house attorney and from what we've read from NAR, it appears that the borrower must be considered for HAMP prior to being considered for HAFA. If a borrower requests HAFA off the bat, the servicer must first run them through HAMP - even if the borrower doesn't want to keep the house. They must offer them the modification if they qualify for it. NAR's publications states as follows:
Servicers must consider HAMP-eligible borrowers for HAFA within 30 days after the borrower does at least one of the following:
o Does not qualify for a HAMP trial period plan.
o Does not successfully complete a HAMP trial period plan.
o Is delinquent on a HAMP modification (misses at least 2 consecutive payments).
I do agree that there is a lot of confusion on HAFA - and in my office, we have all come to the conclusion that we can interpret the guidelines all we want to, but ultimately the servicers are going to have their own interpretation and implement accordingly. In sum, it is going to be a trial and error kind of thing, as is just about everything in real estate.
And I do agree - the investor and the second would likely ruin my sellers' chances anyway. Fortunately, my seller thinks so too and we are carrying on with our "traditional" short sale.
Ok, Riddle Me This......If HAMP borrowers MUST have loans that are backed by Fannie or Freddie, and HAFA loans CAN NOT be Fannie or Freddie, how can one work hand in hand with the other???
Just wanted to note as others mentioned, if the seller (borrower) already has a buyer for a shortsale, they should submit an Alternative RASS. I have a case where the borrower is trying this, but I think the lender (Well's Fargo) is trying to go through the process of approving an SSA (Short Sale Agreement), but this would seem to be wasting valuable time since there is already a fully executed sales contract and an Alternative RASS would allow for immediate submission of the offer and if approved the short sale would still get the benefits of HAFA.
But how do you get this Alternative Request for Approval of Short Sale (Alternative RASS)?
Also, I may be wrong, but it seems going the Alternative RASS way elminates the Deed in Lieu clause of the SSA (Where the borrower has to give up the home if the timeline isn't met and the short sale is not successful)
Quote from SSA: "By signing this letter, you are agreeing not only to a short sale but also to a deed-in-lieu of foreclosure if a short sale is not successful."
Quote from Alternative RASS: "In the event this transaction is unsuccessful, the Servicer may exercise all remedies under the mortgage, including foreclosure."
I have started a discussion in the HAFA group "Things to Note About HAFA"
According to the HAFA Program Directive, Seller's do not need to first attempt a Loan Modifcation throughr HAMP if they have been relocated, or if they've lost their jobs and are relocating to find a new job. Sellers can move straight to HAFA and a short sale if they meet these qualifications.
Jason Opland
Obvious Choice Realty || The Opland Group
614.408.8078 o
[email protected]
Dave Dayton said:Steele...
You are the first person or place I have heard this from- thanks.... I have a client who I think might qualify for HAFA because his payment exceeds 31% of income. However, everything I have read says he will need to qualify for HAMP first. Can you tell me how you started? I mean did you go to the lender before listing the property? Did you just have your client call and ask 'how do i participate in HAFA?" any help greatly appreciated...
Thanks
Steele V. Propp said:Actually your WF person was wrong on HAFA qualifications. One does not have to go through HAMP. A seller can request a short sale right off the bat. Review the HAFA guidelines and you will see this in addition to the other items.
Personally if you have a short sale in process it makes no sense to switch to HAFA (IMHO). Between investor and seconday lien fallout it would probably not come together anyway.
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